Discredited Berkeley Team Again Praises Wage Hikes

Earlier this year, the Albany Times-Union explored the cozy relationship between labor unions and a research outfit at the University of California-Berkeley. The Berkeley team–which is partially funded by and works closely with organized labor–is often called upon when a favorable report is needed on the impacts of a rising minimum wage.

They don’t disappoint: Asked by the Times-Union if their research had ever delivered anything other than a favorable report, the Berkeley team couldn’t name one example.

The latest entry in their rose-colored repertoire was released on November 29th, conveniently timed to the same day as the SEIU’s latest fast food strike. The press release predictably proclaims that “minimum wage increases are a real boost for restaurant workers and don’t hurt business.” In San Jose specifically, the professors claim that the city’s 25 percent increase in the minimum wage only caused a minimal increase in restaurant prices without reducing jobs.

But the authors conclusions about the labor market impact are only based on overall restaurant employment in San Jose. This is woefully incomplete: For starters, it completely ignores the impact on younger and less-skilled job seekers, who are greatest risk of being displaced.

The stories back up the statistics: The city’s oldest restaurant, Original Joe’s, had to cut back on staff and employee hours. Co-owner Matt Rocca told USA Today that the hike cost his restaurant $90,000 a year, forcing him to lay off five of his 67 employees and shift closing time up to 11 p.m. They also had to increase prices 10 percent—several times higher than reported by the Berkeley team.